State port operator Pelabuhan Indonesia II has asked the government for a 99-year concession to operate Terminal I at New Priok Port in Kalibaru, an official at the company said on Monday.
Rima Novianti, corporate secretary for the state-run enterprise known as Pelindo II, said a long-term concession was reasonable considering the huge investment that would be poured into the New Priok Port project.
“In other countries, investors that build a port typically get a concession of more than 50 years,” she said.
New Priok Port is a big project to revamp and expand Tanjung Priok Port in North Jakarta which will cost Rp 22.66 trillion ($2.4 billion), according to Pelindo II.
The project involves the construction of three container terminals as well as two fuel depots that can accommodate oil and natural gas. Terminal I is one of the three container terminals.
Most of the money will be spent on building the terminals, which will have a capacity of 4.5 million 20-foot multi-purpose containers. According to Pelindo’s estimate, that will cost Rp 16.5 trillion to Rp 17 trillion.
The rest will be spent on the two fuel depots, toll roads that connect the area, an industrial zone and a power station. Pelindo II is expected to find a partner as well as loans to help fund the project. “Terminal I of New Priok is scheduled to start operations in 2014,” Rima said.
Pelindo II is studying the environmental impact assessment of the project, a requirement it must fulfill by law.
Rima said that if everything was above board, Terminal I could open in July 2014.
Leon Muhammad, the director general of sea transport at the Transportation Ministry, said the government had to assess the environmental impact of the terminal’s construction and that it was keen to prevent monopolistic practices in the operation of sea ports.
Pelindo II received a permit to build the terminal from Transportation Minister E.E. Mangindaan on June 13.
Natsir Mansyur, deputy for trade and logistics at the Indonesian Chamber of Commerce and Industry (Kadin), said the government should prioritize the project as Tanjung Priok port was overloaded. The port, which accounts for 65 percent of exports and imports, can handle 5 million 20-foot multi-purpose containers. Once New Priok Port is built, the capacity is expected to increase to more than 9 million.